The Tata Nano has failed to establish itself in the Indian market

 

The Tata Nano, the cheapest car in the world, was produced to power the  popular people masses in India, where the motorization rate is still very low. When the model was introduced in 2008, it created sensation, partly due to its price of 1560 euros, a price defying any competition.


The carmaker was indeed targeting two-wheelers users (numerous in India) with this minimalist model. Tata’s objective  was selling in a first phase 250,000 Nanos per year, and then then 500,000 per year. But difficulties in the construction of a dedicated plant, then the 2008 financial crisis forced the carmaker to postpone the vehicle’s SOP Start of Production) to 2009.

 

Due to multiple difficulties and Nano’s transfer from the initially planned plant to another one, as well as significant investment realized for the acquisition of Jaguar Land Rover, Tata had to increase the price of the Nano by 25%, to 1,950 euros. The carmaker managed to sell 17,500 vehicles in 2009 and 60,000 vehicles in 2010, instead of 250,000 vehicles planned.

 

Due to the increase in cost of raw materials, Nano’s price jumped then to 2 700 euros. For this price, many Indian customers prefer to buy a used car, which is more rewarding and more livable. Consequently, the Nano sales could not exceed 70,000 vehicles in 2011 and 80,000 vehicles in 2012. At this rate, the Tata Nano will hardly exceed the 100,000 vehicles annual sales. Manufacturer's dream to motorize the Indian masses with this model became a wishful thinking.


13-13-9

  

 

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